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Countries like the UK are dominated by the business of deciding "who owns what". Of course the people running the system are "earning" a whole lot of money for themselves.

But money is a strange thing. Almost everyone you speak to doesn't understand it. People think the money itself---the bank notes and numbers in an app---are "worth" something. The system itself does have value because it enables asynchronous trade, which seems to be a good thing. But when you tell people that the numbers in their bank account were just created from thin air by some bank who lent someone money at one time, their eyes glaze over.

When you look around it is obvious that there really are people who are "good with money", and people who are not. Who knows if the poor understanding is intrinsic or has been nurtured by the finance sector. But if we accept that money is a good thing and that some people are bad with it, then that does mean the finance sector has some value.

Bitcoin has long been about greed, unfortunately. In the beginning it seemed like a majority were in it because they saw the value of trustless electronic cash. A system much like gold but completely electronic and completely accurate. But it hasn't been about that for a while. Today you can't even move BTC around due to high transaction fees. I can't believe that the current market cap reprents the value in the current system.

Without making a comment on the crypto/tether aspect, I just want to express that it seems to me that the "cause of keeping track of 'who owns what'", as you put it, is precisely the singular technological achievement which has enabled the "human condition" to evolve to its current state. Money is literally the decentralized, asynchronous, dynamic, and continuous computation that has evolved to process the combinatorial coordination of signals/information on resources between 7+ billion unfathomably complex and independent agents. To me, the staggering thing wouldn't be that "70% of our resources and jobs are dedicated to this nonsense", but rather that the technology known as money is so incredibly efficient that it leaves 30% surplus (in this example) for society to further grow.

> Money is literally the decentralized, asynchronous, dynamic, and continuous computation that has evolved to process the combinatorial coordination of signals/information on resources between 7+ billion unfathomably complex and independent agents.

I liked that thought, however, I don't agree with the sentence that followed it. We can do way better than that, if we're designing the "next gen" currency, it better give us way more productivity.

Really?

You really think that having only 30% of output go into actual, productive endeavour would be a good thing?

It just screams of a completely broken system to me, and inefficiency.

I could understand if your attitude was that, well, it seems it had to be this way, it's the best we can do. But to actually celebrate a ~2:1 ratio of fund-shuffling busywork over production seems crazy.

Don't get me wrong, I work in the sector right now, I'm happy to get paid for it, and I can see a use for what I'm doing (exposing data for use in new services) but really not so much when it comes to using distributed supercomputers and thousands of coders to try to predict tiny market movements. And really not "burning energy as fast as possible to (adversarially) compute transactions on a shared ledger".

Just what exactly is your definition of an "actual, productive endeavour"?

Is it really that ridiculous that we dedicate a lot of resources to keeping track of who owns what? We're a mostly capitalist society, right? In a system where private ownership reigns supreme, you absolutely need to keep track of who owns what or we'd have even greater wealth inequality than we have now. Personally, I'd like to see some kind of anarcho-syndicalist structure but let's be honest our greatx10 grandchildren will probably still be capitalists.

This article is a little over-the-top in some spots, but the main point is correct. Cryptocurrency is an innovation in accounting: https://hackernoon.com/why-everyone-missed-the-most-importan...

Cryptocurrencies are trying to make trustless transactions a reality so we don't need a human workforce to keep it all mostly accurate. Don't get too disappointed yet, this stuff is just getting started.

A "lot" of resources would be 1% IMHO.

If society is burning up not just a lot, but a majority of its effort in servicing its model (resource tracking), it seems to me something has gone very very wrong.

You need to keep track of who owns what. You don't need to make that such a complicated thing that it takes vast portions of available human effort to track, and sucks in vast portions of the fruits of said effort.

You don't have to be an anarchist to think that that's ridiculous.

We can do that with trust and the vast majority of people don't care.

I don't disagree that it's a depressing waste of existence to spend one's life keeping track of stuff. Especially if it's not even your stuff. But we've only had the computing power to take a load off us humans for a decade or two. And plus everyone needs a job (pointless or not) or the unemployment statistics start to freak people out. It's sort of the hand we've been dealt, the whole "let's work hard now for a better future we'll never see" thing.

I think the situation will improve dramatically when some of these crypto projects begin to mature. From what I can tell, blockchains are the opposite of lightweight, and personally I'm not holding my breath for one to become useful for anything besides profit anytime soon. I think something like IOTA is a better candidate to be useful (a fee-less directed acyclic graph, not a blockchain). It's more like a new communications protocol that will allow machines to conduct their own transactions with each other. The team's goal is to make it useful first, and if it's profitable too well that's great. Maybe I'm just not that creative anymore, but I can't see a production-quality future for blockchains, and would agree that giant PNW datacenters doing nothing but proof-of-work is a massive waste of resources.

That said, these are mostly just research projects hoping they have one of the big ideas that will win.

I disagree with the approach to just say "this all sucks". It sucks in particular ways, but I do agree with the other comment that this system has gotten humanity this far, so there are certain benefits to it. I hope in the future we'll have better systems than money to be able to allocate resources.

So we need to understand why part of it sucks, why part of it is great, and develop better alternatives that are also great but suck less. For example, it is important to keep track of who owes what to whom, otherwise people can't trust each other to make promises on a large scale with strangers. It's less good that people can gain a lot of profit simply by manipulating numbers and moving financial instruments around. Part of this stems from all value judgements being collapsed down into a single number which of course can never be self-consistent [1], part of it stems from informational differences between actors and other real-world deviations away from what a "perfectly-liquid" market should look like. If financial activity was truly a "market optimisation" mechanism, we ought to be able to replace the entire thing with a neutral algorithm and get rid of bankers and personal profits here completely.

[1] you cannot totally-order a 2-vector (and in general a n-vector) so that the ordering obeys the neighbourhood principle

Proof of work is not the only scheme to ensure consensus. There are multiple projects based on some kind of proof of stake. One of the most promising such projects is EOS in my opinion. I suggest you not to gain knowledge about cryptocurrencies on HN. Yes, cryptocurrency forums may be an echo chamber, but HN seems to be the other way around. Lot of HN-ers are extremely cynical about cryptocurrencies, so you will mostly hear the bad news here. Reality is not as black and white as most commenters here suggest.

New coins using proof-of-stake should look to Peercoin for guidance. It's the oldest PoS coin, had no premine/developer fee. (note that it does use PoW for distribution).

> Lot of HN-ers are extremely cynical about cryptocurrencies

I think cryptocoins are great but we can all see folks dumping their money into assets that they have no hope of understanding, guided by FOMO. As a whole it seems like there's not enough cynicism.

I understand your sentiment.

However, I think about it slightly differently -- crypto currencies (and their likes) are just an attempt to replace man-power with computer-power. We need someone to enforce the rules without human intervention, hence, freeing up more people to do stuff that doesn't involve managing the abstraction of money.

edit: When we imagine "mining" in this realm, it'd help to think in terms of mining abstract resources like cost for verification of a transaction, rather than tangible resources like coal.

Most of the other layers of abstractions and tech are still present.

We literally are mining coal to burn it in powerplants to energize servers and GPUS to waste clock cycles to find "coins".

The world is the realm and how we use its people and resources matters, especially when its to just create more entropy faster then natural systems.

> We literally are mining coal to burn it in powerplants to energize servers and GPUS to waste clock cycles to find "coins".

I'm curious to know what the carbon footprint of a human is, that way we can compare it to the GPUs doing an equivalent amount of work (which I think will be tricky to determine in the first place).

> The world is the realm and how we use its people and resources matters, especially when its to just create more entropy faster then natural systems

if anything, we're pushing entropy away, we're tending towards order not away.

Natural systems self renew. Mining coal to mine bitcoin isn't anywhere close.

And the legacy systems from barter to bitcoin are all still around.

I agree, we should stop generating electricity using fossil fuels.

That said, I don't think it's right to just short the connection between "coal" and "bitcoin", we aren't mining coal to get bitcoins, it just so happens that majority of the electricity generated is through coal and mining uses electricity, so does our conversation on the internet.

> And the legacy systems from barter to bitcoin are all still around.

I'm not sure I get your point here. At some point, money of any form will be exchanged for goods or services.

According to rensmart.com, 1KWh is approx. 0.5 kg of CO2 saved/used.

A RX480 uses 160W on average according to TomsHardware, mining might pull more but lets use that as a conservative example.

A Mining Rig, decent one, might have 4 cards and pull 100Watts for itself (conservative estimate).

That puts the total power of the rig at 750Watts (approximately)

This will yield a hashrate of about 20MH/s for each card or 80MH/s for the entire thing (atleast from what I can tell)

So the right has about 0.7KWh per hour for 80MH/s, which yields about 0.35kg of CO2 every hour.

Ethereum has a total of 120TH/s or about 1'500'000 of these mining rigs. Which means the total carbon footprint estimate of Ethereum is about 525'000 kg or 525 Tons each HOUR. And that is using my conservative estimates.

The entire year (ass. 365 days incorrectly) is 191'625'000, or about 191 kilotons of CO2.

To comparison, a single person uses about 6 to 8 tons o CO2 per year so Ethereum alone produces as much CO2 per year as 191'000 people combined.

>if anything, we're pushing entropy away, we're tending towards order not away.

What order? Burning any fuel is literally increasing entropy. If you break a wineglass you increase entropy. If you repair the broken wineglass you still increased entropy. Entropy inevitably goes up and you can maybe delay it by putting in massive amounts of energy compared to the entropy saved.

Thank you for the numbers!

Assuming those estimates are correct (I haven't verified it), I think it's hard for me to believe that there are fewer than 191K people working to manage an equivalent number of financial transactions in USD.

I tried this wolfram query: http://www.wolframalpha.com/input/?i=number+of+people+workin...

Yes, we are increasing entropy outside of ourselves but not within, if the population of humans is increasing, humans have acquired more negentropy from the environment and are "winning" against entropy as they get better at extracting energy from the environment, we'll run out of energy in the form of fossil fuels soon, so we'll have to find another source of energy, because we need more energy to decrease entropy.

Let me be clear(er) in saying that I don't support burning fossil fuels, I think OP linked mining bitcoins directly to burning coal -- we're mixing two very separate arguments here. Burning fossil fuels for generation of electricity is a topic on its own.

>I think it's hard for me to believe that there are fewer than 191K people working to manage an equivalent number of financial transactions in USD.

The problem is, this estimate is just for Ethereum. It does not account for Bitcoin which must arguably have a much larger energy usage.

The thing about these 191K people is that Ethereum uses them just for transactions while people working in the banking industry will most likely not spend most of their carbon footprint just on managing transactions.

Most modern banks also don't manage transactions with employees anymore, they use computers to transact. They use the power invested into transactions more efficiently, the energy used being directly proportional to the amount of transactions moved around, the human meat sacks are only there for the smiles and managing things the computers can't do. yet.

> if the population of humans is increasing,

> are "winning" against entropy as they get better at extracting energy from the environment

Making a human is a net increase in entropy. Burning fuel is a net increase in entropy.

>so we'll have to find another source of energy, because we need more energy to decrease entropy.

This is not a fight you can win as the amount of energy you need to expend is magnitudes larger than the amount of entropy you decreased, actually, by the law of thermodynamics, any energy you expend to reduce entropy will produce an equal or larger amount of energy as a result.

Entropy may decrease temporarily in a locality but overall it will always increase inevitably.

I ran out of HN time yesterday, so here's my delayed response.

> Most modern banks also don't manage transactions with employees anymore, they use computers to transact.

so, there's some of that carbon expenditure going into computers and networks to manage these transactions? Banks also use your money to make more money for themselves, does that bother you at all? considering that this thread started out by looking at things "holistically".

In any case, my point here isn't that crypto currencies are the best thing ever, but they're definitely a step in the right direction. I hope you can see the potential in these ideas and what they're trying to achieve. Basically, we need a system that can't be defeated with fraud, if everyone was honest we could just pass around a piece of paper and ask everyone to write down how much money they have and we'd be good, unfortunately that's not the case, as I see it, most of it is a just the cost of preventing cheating, we can certainly observe the current networks and come up with better ones in the future.

> Making a human is a net increase in entropy. Burning fuel is a net increase in entropy.

> This is not a fight you can win as the amount of energy you need to expend is magnitudes larger than the amount of entropy you decreased, actually, by the law of thermodynamics, any energy you expend to reduce entropy will produce an equal or larger amount of energy as a result. > Entropy may decrease temporarily in a locality but overall it will always increase inevitably.

so, are you suggesting that we stop reproduction and burning fossil fuels and slow down the "advance of entropy"? (or is it just bitcoin you want stopped?)

Also, "net increase" in what system?

>so, there's some of that carbon expenditure going into computers and networks to manage these transactions?

Yes, but a bit less, with high confidence.

>Banks also use your money to make more money for themselves, does that bother you at all?

Not really, miners in bitcoin also make money, don't they?

Additionally, European Banks announced they're starting SCT Inst, SEPA transactions which are confirmed in 15 seconds instead of overnight. My bank doesn't charge me fees for it.

Why bother with bitcoin's immense carbon footprint when it can't beat the lower effective carbon footprint of banks if they are faster and cheaper?

>but they're definitely a step in the right direction.

I can agree with that, but they need to fix things to be applicable for a wider audience.

> we can certainly observe the current networks and come up with better ones in the future.

I'm currently somewhat invested in Ethereum since they plan to go into PoS which would be immensely more efficient.

>so, are you suggesting that we stop reproduction and burning fossil fuels and slow down the "advance of entropy"? (or is it just bitcoin you want stopped?)

No at all, just refuting that you can decreaser net entropy.

>Also, "net increase" in what system?

In the closed system that is the reachable universe. In any closed system, net entropy increases over time. That's nothing inherently bad, just a property of closed systems.

You can somewhat "cheat" and decrease entropy in some parts of the system but the entire system will increase or not decrease it's entropy.

In the banking sector only a small fraction of employees are required to run the payments infrastructure (in one example, 2% of employees ran the business part of payments, and another 2% of employees could be the IT infrastructure part required for that); payments are highly automated and almost everyone is handling the other parts of the banking business e.g. lending and investments.

Visa and mastercard together employ ~20k people and handle much, much, much more transactions than all the cryptocurrencies combined.

The EU SEPA customer payments system handles ~1000 times more transactions than ethereum, and the infrastructure for running that (spread across all the involved banks) likely takes thousands of people, but not 200k, and certainly not the 200 million people that would be required to do so as horribly inefficiently as cryptocurrencies do.

> Visa and mastercard together employ ~20k people and handle much, much, much more transactions than all the cryptocurrencies combined.

20K people (debatable) and a bunch of computers and networks which need to be managed by more people, and the infrastructure doesn't run on sunshine either (yet).

Without laboring the point, if your position is: * The methods applied by the crypto currencies waste more energy than our current system of currency.

I'll accept this, iff we make sure we've collected data rigorously and we notice that the difference is significant. Even then, there's no reason to give up on the idea of crypto currencies, we just have to make it more efficient.

Proof of work systems (such as bitcoin and ethereum as of now) inherently cannot be made more efficient - their security requires that approving transactions must take so much computing power that an attacker can't afford to burn as much resources as they'd need. It'd be trivial to make the processing 100 or 10000 times more efficient, but that would defeat the whole purpose - instead, the computational (and thus energy) requirements must grow as the currencies become more valuable and processors more affordable; that's why we have the scalable difficulty factor in bitcoin etc - so that the mining gets less efficient with time.

Thank you for this.

The purpose of bitcoin mining is not to "find coins," although the mining reward might make it seem like that. The purpose is to provide enough hashing power to the network to cryptographically verify transactions using a consensus algorithm, which prevents any single actor from double-spending. Without enormous hashing power, the network would be vulnerable to a 51% attack by a sophisticated attacker.

This is not to say that proof of work is the best consensus algorithm, but given it's age, the fact that Bitcoin has stood up so well to the test of time is a testament to it's viability as a consensus protocol.

Proof of work was the first, crude consensus algorithm for crypto-currencies. A lot of more eco-friendly consensus algorithms have been proposed. Ethereum, the second largest crypto-currency in the world, is currently moving towards a Proof-of-stake consensus algorithm, instead of the old proof-of-work one.

Don't forget that decentralized currency is a rather new technology, and is constantly seeing progress being made on all fronts. You can even mine Grid coins doing SETI and Protein folding work!

> Ethereum [...] is currently moving

* has been moving for years with no end in sight

The global financial sector is about 13-19% of the global economy, and 20-30% of the global services sector: https://www.investopedia.com/ask/answers/030515/what-percent...

Which is higher than it should be, but thankfully not 70%...

The above probably includes the accounting industry but not all employee accountants/cashiers embedded in all companies, but even if it did, it would move the needle only a bit (maybe 10% of employees?)

> I would guess that 70% of our resources and jobs are dedicated to this nonsense

I think that's a wild overstatement, even if you're including every kind of management and public service job in the world.

> One of the early promises of cryptocurrency was to "sick it to the man and governments". Now its powered largely by greed and consuming our most important resources in breakneck speeds.

There is a really critical distinction between truly trustless currencies like bitcoin and "managed" [centralized, trusted] assets like the ones Ethereum offers. Interesting that once you start to grant some amount of trust there are options that don't leverage proof-of-work at all, so the waste is not necessarily a concern.

Proof-of-work is "only" necessary if you want trustless coin w/egalitarian distribution. Some folks would argue that it's not necessary to be truly trustless (perhaps bootstrapping a new bitcoin node could suffer a DoS from a sybil false-chain attack, at which point you would trust someone authoritative's copy of the blockchain).

No matter how you slice it, you should be very, very suspicious of any new cryptocurrency and super extremely suspicious of any new "crypto-asset".

And then there is the whole "root of all evil" thing.